The battle that print industry fought in 2017

Print journalism in India seems to persistently be in a race against time and technology. When news updates can be read on smartphones instantly in this day and age, newspapers are still being published at a 24-hour gap. “To search that new identity for itself, is the greatest challenge that the print media faces today,” said Union Minister Arun Jaitley.

In urban areas, social media is becoming an effective source of news and yet, the print industry in India continues to grow. However, the growth rate is slowing down.

While it can’t be denied that digital media has restricted the growth of Television, Radio and Print; it should be noted that the boom of digital media has impacted English publications more than the regional language publications.

According to KMPG, regional language newspapers are expected to drive the sector growth as advertisers are now more interested in the medium. But, the rising digital content consumption is still perceived to be a long-term risk to the industry.

In 2017, the print industry had to tide many troubled waters besides surviving the digital media wave. Demonetisation, implication of Goods and Services Tax (GST) and restrictions on press freedom has impacted the industry irrevocably.

Demonetisation

The print media majorly depends on advertisement and circulation revenue. The period arguably saw a fall in both.

With demonetisation being announced on November 8, the sector saw one of the worst ever economic slowdowns. “From November 9, 2016 till end of February, 2017, the business came to a complete standstill,” said Sandeep Khosla, CEO of Mid-day. "Our major revenue comes from retail and realty and both were hit badly post demonetisation,” he added.

“People were more interested to retain cash for buying necessary items. Purchasing printed matter is not the first priority for anyone,” said Paresh Nath, Publisher, Delhi Press.

According to KPMG report, due to cancellation of Release Orders (ROs) from major advertisers, many English, Hindi and other regional newspapers were impacted and there was a consequent reduction in the number of pages during the November – December period. Q3’17 revenues of print-media companies reported margin de-growth of 3 to 5 per cent.

Circulation revenue of newspapers/magazines was also impacted due to note ban for a short period, as most of the hawkers and vendors generally deal in cash. Additionally, classified ads also reduced as even they relied on cash transactions.

Goods and Services Tax

“People were just learning to deal with demonetisation and GST was announced, affecting the ad spend. The impact was equally bad,” said Varghese Chandy, vice president, Malayala Manorama. “We saw the retail trade being badly impacted post the economic reforms, lot of small time retailers were wiped out,” he added.

Under the new tax regime, newsprint was subjected to a heightened tax rate of 5 per cent as opposed to 3 per cent earlier. Print advertisements, which were earlier free from taxation, are also taxed at 5 per cent now.

Indranil Roy, CEO, Outlook Group, told exchange4media that demonetisation did not impact the group as much as the tax reform did. “I think the impact of the slowdown on advertising is a mix of demonetisation and GST. GST has a bigger impact on advertising,” Roy said.

Regional vs English language publications

In the quarter ending in September 2017, HT Media, the publisher of Hindustan Times and Mint, showed a decline in advertising revenue by 8.14 per cent as compared to the second quarter of the previous year. The ad revenue fell to Rs. 395 crore from Rs. 430 crore during the same period, last year.

“Advertising revenue growth continues to be a challenge in our core Print business, with this quarter witnessing high level of uncertainty across industries on account of GST implementation,” said Shobhana Bhartia, Chairperson and Editorial Director, HT Media.

On the other hand, Sudhir Agarwal, Managing Director, DB Corp Ltd (DBCL), said, “We are happy to report another quarter of noteworthy progress and implementation of several growth-oriented initiatives.”

Interestingly, the existing data on language wise ad revenue confirm the trend of how regional language newspapers are registering strong growth while English Publications are finding it hard to match the pace.

In 2016, English newspapers’ ad revenue grew by 3.5 per cent and for Hindi and other regional language newspapers, it was 7.1 per cent and 8.7 per cent respectively.

"With smaller towns and villages becoming more aware and educated, regional will continue to grow. It's the English newspaper which needs to worry and rethink their strategy, "said Vijay Darda, Chairman, Lokmat.

Circulation of print publications

In contrast to developed countries, India’s paid-for daily circulation is growing. Print industry in India is growing at 4.87 per cent in CAGR over a 10 year period. In 2016, the industry grew at 7.0 per cent.

Although the growth rate is positive, English language newspapers are under too much pressure with the rise in readers’ interest in digital content. However, the language newspapers are driving growth in viewership as well as advertising.

With regional newspapers’ growth of 9.4 per cent, Hindi and English newspapers are growing at 8.3 per cent and 3.7 per cent respectively.

However, the Audit Bureau of Circulation’s (ABC’s) data for the period of January-June 2017 and July-December 2017, shows a decline in circulation numbers of many member publications across languages.

For the top 20 dailies across languages (member publications,) the growth rate of circulation is negative 0.04 per cent for that period. Amar Ujala, a leading Hindi Daily, showed a decline in circulation during Jan-June 2017; however, Virendra Pathania, Vice President Sales Promotion and Market Development for the group, told us that Amar Ujala showed “significant growth of 12 per cent in circulation in 2017.”

Weekly news publications and magazines are in the same boat.

Although, it is difficult to attribute the negative growth rate of circulation figures to demonetisation and GST, they surely seem to have played a role.

As Paresh Nath, Publisher of the Delhi Press, said, “Purchasing printed matter is not first priority for anyone. People were more interested (during the period of demonetisation) to retain cash for buying things of day to day needs than to spend on newspapers or magazines.”

On August 30, Ministry of Information and Broadcasting (I&B) entrusted the Press Information Bureau (PIB) with the task of verifying the circulation of newspapers. This was the first time that PIB had been tasked with verifying circulation of newspapers. Before this, the task was undertaken by the Registrar of Newspapers of India (RNI.)

According to media reports, the step is taken keeping in mind the 2019 General Elections so that the Directorate of Advertising and Visual Publicity (DAVP,) a body that decides allocation of government advertisements to newspapers, knows which newspapers to give ads to basis their real circulation numbers.

Censorship

The year 2017 witnessed many such incidents that were last witnessed during the Emergency period.

On November 1, Rajasthan Patrika, a national daily, wrote a sharp front page editorial stating that it will not report any news related to Rajasthan Chief Minister Vasundhara Raje or her government officials until the controversial Criminal Laws (Rajasthan Amendment) Ordinance, that bars media from naming public servants and politicians as accused, is revoked.

On National Press Day, November 16, symbolic of a free and responsible press in India, the national daily, left its editorial space blank to register its protest against the threat to freedom of press.

Similarly, newspapers in Tripura left their editorial spaces blank to protest the killing of a journalist, Sudip Datta Bhowmik, by a Tripura State Rifles personnel at the headquarters of 2nd battalion and in Manipur, major newspapers left its editorial blank to protest burning copies of Poknapham newspaper by members of BJP youth wing for allegedly publishing ‘disparaging’ content against the prime minister.

Additionally, Hindustan Times Editor, Bobby Ghosh, stepped down from his position in September amid rumours that his exit was preceded by Shobhana Bhartia’s, Chairperson HT Media, meeting with the prime minister.

Soon after Ghosh’s exit, Hindustan Times took down its hate tracker initiative, a microsite that aimed at being a “national database on crimes in the name of religion, caste and race.” This was initiated by Bobby Ghosh.